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Institutional rules, labour demand and retirement through disability programme participation

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  • Kyyrä, Tomi
  • Korkeamäki, Ossi

Abstract

We use matched employer-employee data from Finland to model transitions out of work into sick leave and disability retirement. To identify the role of institutional factors we exploit reforms that changed medical requirements for disability pension eligibility and experience-rated employer contributions. We find that transitions to sick leave and disability pension benefits are relatively rare in growing establishments, but rather common in establishments with a high degree of excess worker turnover. We also show that transitions to disability retirement depend on the stringency of medical screening and the degree of experience rating applied to the employer.

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  • Kyyrä, Tomi & Korkeamäki, Ossi, 2010. "Institutional rules, labour demand and retirement through disability programme participation," Working Papers 16, VATT Institute for Economic Research.
    • Handle: RePEc:fer:wpaper:16
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    References listed on IDEAS

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    Cited by:

    1. Sergi Jiménez-Martín & Arnau Juanmarti Mestres & Judit Vall Castelló, 2019. "Great Recession and disability insurance in Spain," Empirical Economics, Springer, vol. 56(5), pages 1623-1645, May.
    2. Sergi Jiménez-Martín & Arnau Juanmarti Mestres & Judit Vall-Castello, 2016. "Great Recession and Disability in Spain," Working Papers 896, Barcelona School of Economics.
    3. Koning, Pierre & van Lent, Max, 2022. "Workers' Moral Hazard and Insurer Effort in Disability Insurance," IZA Discussion Papers 15164, Institute of Labor Economics (IZA).
    4. Halapuu, Vivika, 2021. "Access to education and disability insurance claims," Working Paper Series 2021:17, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    5. Kyyrä, Tomi & Tuomala, Juha, 2023. "The effects of employers’ disability and unemployment insurance costs on benefit inflows," Labour Economics, Elsevier, vol. 85(C).
    6. Matthew J. Hill & Jose I. Silva & Judit Vall Castello, 2019. "Act now: The effects of the 2008 Spanish disability reform," Health Economics, John Wiley & Sons, Ltd., vol. 28(7), pages 906-920, July.
    7. Kanabar, Ricky & Nivalainen, Satu & Järnefelt, Noora, 2023. "‘Relabelling’ of individual retirement pension in Finland: application and behavioural responses using Finnish register data," ISER Working Paper Series 2023-05, Institute for Social and Economic Research.

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    More about this item

    Keywords

    Disability pension; sick leave; experience rating; Labour market; Työmarkkinat; Labor market and policies promoting economic growth; Työmarkkinat ja kasvua tukeva politiikka; J140 - Economics of the Elderly; Economics of the Handicapped; J230 - Employment Determination; Job Creation; Demand for Labor; Self-Employment; J260 - Retirement; Retirement Policies;
    All these keywords.

    JEL classification:

    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination

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